The U.S. Securities and Exchange Commission (SEC) has recently announced the withdrawal of several regulatory proposals initiated during Gary Gensler's tenure, including the expanded Custody Rule and changes to the definition of exchanges for DeFi platforms.
Withdrawal of Expanded Custody Rule
The SEC has officially rescinded its proposed expanded Custody Rule, which recognized all client assets—including cryptocurrencies—as subject to stricter custodial requirements. This rule aimed to tighten controls over asset custodians.
Reduction of ESG and Climate Disclosure Requirements
In addition, the SEC has also stepped back from its defense of certain climate-risk disclosure rules and enhanced ESG reporting mandates, initially proposed during the Biden/Gensler administration.
Future Regulatory Outlook
These changes signal that the SEC under new leadership may adopt a lighter regulatory approach. Crypto firms and DeFi platforms can expect reduced compliance burdens, while ESG-focused corporations may face shifting priorities.
The withdrawal of Gensler-era rules reflects significant changes in SEC regulatory philosophy, potentially impacting regulatory approaches in both the crypto and ESG sectors.
